The Governmental Accounting Standards Board has published guidance on what constitutes fiduciary activities for financial reporting purposes for state and local governments, how fiduciary activities should be reported, and when liabilities to beneficiaries should be recognized.

Under the current standards, state and local governments are supposed to report their fiduciary activities on fiduciary fund financial statements. The existing standards don’t specify, though, what constitutes a fiduciary activity for financial reporting purposes. Thus, there are differences in practice when it comes to identifying and reporting fiduciary activities.

accounting standards

The new guidance, GASB Statement No. 84, Fiduciary Activities, sets out several criteria for identifying fiduciary activities of all state and local governments. The criteria revolve around whether a government is controlling the assets of the fiduciary activity, along with the beneficiaries with whom a fiduciary relationship exists.

Other criteria identify the fiduciary component units and postemployment benefit arrangements that are fiduciary activities.

GASB said an activity meeting the criteria in Statement 84 should be reported in a fiduciary fund in the basic financial statements. Governments with activities meeting the criteria should also present a statement of fiduciary net position and a statement of changes in fiduciary net position.

The new guidance details the four types of fiduciary funds that should be reported, when applicable. Statement 84 also clarifies the definitions of the types of fiduciary funds associated with trusts that meet specific criteria: pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds, and custodial funds. Activities that are currently reported in agency funds will be classified as custodial funds when Statement 84 is implemented.

Michael Cohn

Michael Cohn, editor-in-chief of, has been covering business and technology for a variety of publications since 1985.